Here's something to share with your automotive clients...from new to previously owned vehicles.           Philip Jay LeNoble, PhD

AUTOMOTIVE

Gen Z Regards Vehicle As 'Third Space'

• by Tanya Gazdik , December 7, 2022

A majority of Gen Z (75%) view their vehicle as a “third space,” according to a report from DTS, Inc., a subsidiary of Xperi.

“The Vehicle as a Third Space” discusses the increasing importance of the vehicle as a third space, as well as uncovers drivers' preferred in-cabin features and functionality.

A third space is defined as a place outside of home (first space) and work (second space), where consumers go to relax, enjoy hobbies and escape the stresses of work -- like a coffee shop, library, park or vehicle.

Based on results from a national consumer Caravan survey conducted by Big Village, the report finds that 75% of Gen Z drivers (ages 18 to 25 years), and 49% of drivers overall, are more likely to view their vehicle as a third space today, compared to pre-COVID.

“Automotive has conquered the vehicle exterior, but the next evolution is all about solving the vehicle interior, especially its role as a third space,” Jeff Jury, Xperi senior vice president and general manager, connected car, says in a release. “This demands technology that can merge safety with a vehicle cockpit that meets their entertainment, comfort, personalization and wellness needs. It is the future of the connected car industry.”

Using their vehicle as a third space is the top reason drivers say their personal vehicle is more important today (52%), followed by discomfort with public transportation or ridesharing (48%), and the vehicle’s ability to offer a place of refuge (41%) during these challenging times.

Drivers want increased safety and peace of mind (82%) design choices in their vehicle, followed by comfort (80%), and audio/radio entertainment (79%). Convenience, personalization and health features also rank highly.

A majority (69%) say advanced personalization (vehicle “knows” you and your occupants, and can adjust/personalize music choices, lighting, temperature, etc.) is important in enhancing the third space experience. One in four would like a radio in-dash experience that is more robust, immersive, visual and informative.

Almost all (91%) of Gen Z and Millennial drivers are interested in responsive mood-sensing technologies such as a sound bath or music activated by sensed state of mind, while 67% of respondents are interested in vehicle sensors that can assess health and illness — from heart rate to respiratory rate to facial changes.

And film/TV streaming, lighting, aromatherapy, and interactive video games are a top three feature of interest for at least one in four respondents.

Among those who do not think of their vehicle as a third space, nearly one in three would if it was completely self-driving.

The Caravan survey was conducted online in third quarter 2022 by Big Village and included 844 U.S. adults who currently own or lease a vehicle. 

 

COMMENTARY

TV Legacy That Remains: What Gets Cut Next and What Stays on TV Networks?

• by Wayne Friedman , Staff Writer, December 6, 2022

Legacy national TV networks' distribution systems continue to see lots of cord-cutting. Who's next?

To give you an indication of how traditional pay TV business has declined in the recent third-quarter period, legacy pay TV services -- including new virtual pay TV services -- are now in just 61% of U.S. households, according to MoffettNathanson Research. 

That level has not been seen since 1993. 

Imagine if this dropped to a 40% level -- as last seen in 1987. That was a period of extreme U.S. financial instability, where the stock market had a major crash with the Dow Industrials falling 22% in one bleak October day.

Programmatic trading gone wrong was a major reason. Still, in the U.S., The Federal Reserve immediately cut interest rates.

Cable TV distribution was still in its ascendant stage. Satellite TV distribution arrived in 1994. All that meant much TV viewing was still via over-the-air TV antennas.

The big issue then was young TV consumers gravitating to a new technology: cable TV. 

Now young media consumers are searching for and finding a new way to get their entertainment. And it is not just the wide-reaching premium video streaming platforms. 

Much of this can be around social media and other digital platforms, including gaming -- a diversity of new competing media technologies. 

And that is where the likes of all-important live sports and news is headed, both major existing content drivers on broadcast and cable. 

Increasingly, it has found a home on streaming services -- NFL games on Peacock, Paramount+, Amazon; Major League Baseball on Apple TV+. For live news, we have NBC News Now, Fox Nation, ABC News Live, and CBS News Live.

Can sports and news continue to find ways to survive on legacy TV live, linear TV systems? That seems impossible now. So what remains?

Look backwards a bit for answers. When cable was growing, it started to program off-network sitcoms and dramas -- as well as growing sports and news. Analysts wondered about the survival of sports and news content on broadcast, but it is still around -- especially for sports. 

On cable networks, there is a great deal of non-scripted entertainment that supports many channels, as well as scripted entertainment shows.

If networks can hold onto some legacy live TV content this time around -- again, sports and news being a major factor -- then they have a chance to keep all this moving. No doubt to a smaller degree.

Young kids may, however, have other ideas. And the marketplace will move with them. But what if they eventually turn their back on premium streaming video as well?

 

GE Buys Out Entire Edition Of 'The New York Times'

• by Ray Schultz , Yesterday

The New York Times scored a coup on Tuesday both online and in its legacy medium, print.  

General Electric took over all of the paper’s pages, running 22 full-page color ads and five partial pages in a seven-figure campaign that also includes ads on desktop and mobile homepages, on three section webpages, in audio form on the podcast "The Daily" and in two newsletters briefings.  

It's the first time ever that all of the paper’s real estate has been taken over by a single advertiser. 

The package was designed to promote GE’s coming split into three separate companies: GE HealthCare, GE Aerospace, and GE Vernova, all publicly traded, the Boston Globe reports. 

When Times subscribers click on the home page, they receive a banner ad, stating “A new beginning is on the horizon at GE.” Readers can link through to four additional ads, each explaining one of the breakout companies. And they are invited to “Pick up a paper copy to see how focus can change your world, too.”  

According to Axios, which broke the story, the special paper will be delivered to the Times' 330,000 daily subscribers, and 5,000 copies will be placed at Grand Central Station, Penn Station, the New York Stock Exchange and other locations.  

The effort had to be carefully calibrated.  

"This isn’t an off-the-shelf product," Seb Tomich, head of advertising at The Times, told Axios ."It takes a lot of work to clear out the entire paper for one brand."

Addition: Giant Spoon, GE's media agency of record, worked with with T Brand Studio, The New York Times’ advertising creative arm, according to Axios. 

 

A mos def reason to make local-direct a prime target for 2023! Philip Jay LeNoble, Ph.D.

Q4 Scatter Pacing Down 39%

• by Wayne Friedman , Yesterday

The scatter television advertising market -- the near-term buying of TV media -- is revealing a dramatic national linear TV ad market slowdown in the fourth quarter so far, according to Standard Media Index.

Through October, scatter advertising has dropped 39% versus the same period a year ago. It is also down 56% from 2020.

Overall, including upfront TV buying made this past summer, SMI says there is a 8% drop in national TV advertising to around $4.5 billion compared to a year ago so far. Broadcast TV is down 4%, while cable has declined 12%, and syndication is down 19%.

Economic uncertainty in the U.S. and concerns over a possible recession have caused brand marketers to pull back spending, according to analysts.

Scatter advertising typically totals around 25% to 30% of the $40 billion national TV marketplace.

Upfront TV advertising spending bought this past summer and placed in the fourth quarter, however, has been virtually flat so far -- slipping 0.3%. Direct response advertising is down 15%.

The difference between upfront and scatter market TV placed media in the period is “unprecedented”, says SMI.

Brand advertisers with declines in October include consumer packaged goods, down 4% year-over-year; financial services (off 20%); technology (30%); and entertainment/media (10%).

SMI says the declines in technology and financial services have amounted to around $100 million in media spend each.

Categories that have seen increases in TV spend include: Pharmaceutical (9% higher); general business (11%); and travel (33%).

The slowdown in national linear TV is also 5% below the same period in 2020, the initial pre-pandemic year.

Standard Media Index captures actual invoicing data from all major holding companies and most major independents, representing 95% of national brand ad spend.

 

Commentary from MediaVillage

Don't Cut Advertising, Transform It! Bill Harvey Publish date December 07, 2022 (ET) Channel In Terms of ROI Cataclysmic changes to our way of life pelt us with new surprises daily. In this atmosphere it's understandable that marketers may feel that pulling back is the right thing to do. In the animal kingdom from which we sprang, when the turtle feels imminent attack is upon him, he pulls his head in. This could be related. Standard Media Index reports that in Q3 2022 the U.S. TV industry received $8.2 billion in advertising revenues. That's the lowest quarterly total since SMI became fully rolled out in the U.S. in 2017 -- and lower than it was in the first COVID quarters. To continue reading scroll down or view this article on MediaVillage.com Read Q3 of 2019 was $9.5 billion, the lowest pre-pandemic quarter since 2017. That's now down about -14%. At a global level, WARC projects that in 2023, ad spend will decrease in publishing (including digital versions), television (except OTT/AVOD), radio (except online), and digital's growth rate will be chopped in about half. The Standard Media Index data show that both major forms of digital video are growing at about equal rates and the two types -- longform which is the television streaming networks and apps, and shortform which is YouTube and the like -- are about equal size. However, BHC Fox results show that ROAS is more than double for longform (which most people call "premium"). The industry is generally cutting the most premium environments in favor of the lowest CPM environments, thus mostly ignoring the ROAS results in favor of the more front-of-mind CPMs (as always). This is the way people like to fool themselves into oversimplifying media optimization. Ignoring the Return On Ad Spend, which is higher in television and magazines than in nonpremium digital video and far higher than in digital display. Pennywise and pound foolish. Studies by CBS, Nielsen NCS, Innovid, TRA and others have consistently shown that it's very hard to get more than a 10%-13% reach with a digital campaign no matter how much money you spend on it. Courtesy of the Advertising Research Foundation (ARF), here's a graph presented by Dave Poltrack (CBS) and Leslie Wood (NCS) at the 2016 ARF AUDIENCExSCIENCE conference: Here's a link to even more extensive coverage of digital reach challenges by Dave and Leslie as presented in 2017 with Advertising Age media reporter Jeanine Poggi. Cutting television and radio, which are the reach media, is going to pile up all your impressions against a small chunk of your customers and prospective customers. This will then show up as reductions in brand growth and even shrinkage in sales. This graph shows what it looks like when a brand gets hooked on the idea of shifting more and more and more into low-CPM digital and out of TV and streaming. On the left are the chains that moved money out of TV into digital the most, on the right are chains that did the least of this. Over the 3.5-year period studied, brands on the left generally lost sales and never grew more than 2%, brands on the right generally grew sales by as much as 7% when digital dollars were moved back into TV. The green bars are the sales increases. We could go on at great length but let's assume our point has been made about not cutting out premium media based on naïve assumptions. What did we mean in the title about "transforming" advertising? In a world of commoditization, meaningful connections matter more than ever. Studies show that ads that compellingly dramatize the benefit of a truly superior brand are the most effective of all. However, not every brand is superior. Many top-quality brands are of equal quality. If you can't compellingly demonstrate superiority to a thoroughly cynical audience, what tactics can you use in ads that will tilt the needle on brand growth? You can dramatize what you stand for, what values you hold dear which can never be commoditized. You can show the people who stand behind the brand are good people. You can replace normal ads with brand content that has no hidden agenda to promote the brand, but which makes a statement about the good things in people, whether they be heroes or heroines or people who do the right thing. True stories about people, known or unknown, who are inspiring role models for the rest of us in one way or another. Find the good in the human race and put that message where it has the broadest reach …TV ad pods. Brought to you by the brand whose logo could appear at lower right throughout the ad. This is not mere signage. This is profound bonding, establishing trust, authenticity, genuine caring. We espouse the power of brands and their role in culture. This means brands have the power to serve as beacons of trust and optimism. Messages that uplift and encourage. When this has been done in digital its ROI and brand persuasion results are more than 7X those of average 30 second TV spots. It will have even more impact and reach in television. Today while most people are living in deep concern about their lives and the future, be part of their solution. Shore up the people's confidence in themselves and their ability to be resilient and face the challenges. This is an opportunity of a lifetime for wise marketers. It may never come again. Let's hope it doesn't. You can be part of making the future a better one. Do it now.

 

COMMENTARY

How An Economic Slowdown Affects Pricing Strategy

• by Darwin Liu , December 1, 2022

During a recession, businesses large and small experience declining sales and profits. Smaller businesses, lacking the scale of larger companies, are even more vulnerable to failure in a downturn.

There are many approaches to combating the downturn. Efforts to cut costs may include layoffs, as currently seen in the tech industry, or reductions in spending, marketing, or research. This article covers how ecommerce brands can increase profits during a recession with two major strategies.

Value-based pricing. When companies base their pricing on how much the customer believes a product is worth, rather than according to the cost of the product or historical prices, they can increase profitability without impacting sales volumes very much.

The marketer's job is to determine how much demand there is for the product and what customers are willing to pay for it. This will help the marketer determine what price to charge customers and how much profit they can make on each sale.

While pricing value is not an exact science, there are a few techniques. Many factors go into determining the value of a product, including what competitors are charging, the market demand for that product, how well-established the business is, and whether or not the product is new or still in its infancy stage.

While some e-tailers can be hesitant to implement a value-based pricing strategy, they should remember that most consumers expect prices to increase, as many retailers are increasing prices with success.

Additionally, many consumers are new purchasers, and plenty of repeat purchasers may not remember old prices anyway.

Competitor pricing. It is now more crucial than ever for companies to price items relative to the competition, because platforms like Google shopping make price comparison extremely easy. This strategy becomes more common once a product has been on the market for a long time or there are many substitutes for the product.

First, e-tailers need to gather data on competitor pricing. Many brands use a custom script or a third-party tool to scrape pricing.

Then, businesses have three options when setting the price for a good or service.

Firms setting prices above competitors' position the item as a premium and need to create an environment that warrants the premium, such as payment plans or additional features. E-tailers can also win customers with a price slightly below the market average. Lastly, a business can choose to charge the same price as its competitors, but differentiate itself through marketing.

Best Pricing Strategy Mix For You

Most e-tailers need value-based and competitive pricing strategies working cohesively to weather the economic storm ahead. That said, certain products lend themselves well to one strategy or the other.

Distinctive and valuable products are best-positioned to take advantage of the value-pricing model. Competitive pricing works very well for commoditized items or simple products with few variations, such as books. It also works well for items that do not require unique shipping options, such as apparel and accessories.

 

How Brands are Wasting Their Influencer Marketing Budgets

• by Aliza Freud , Columnist, December 2, 2022

Most brands understand the how and why of using influencers for organic awareness, and that’s great. Or is it? If they are simply getting influencers to create content and push it out organically to their followers, brands are leaving a tremendous amount of money on the table and squandering opportunities for much larger gains, basically only realizing a fraction of the value.

To get the most out of influencer marketing, we need to think of it in three steps:

-- Creation of content
-- Amplification of it
-- Impact on sales

Brands can take a strongly performing piece of influencer content and insert it into an ad unit, or put it on their website, and that content will outperform content that the brand creates for itself. Still, when brands just focus on awareness, they are not realizing the full value of that content and how it can impact sales. When these three steps are working together, there’s better engagement rate, dollars are more efficient, and brands achieve much higher ROI. 

Here are 2 critical tips to do this successfully:

1. Negotiate rights to use the content. This can be done upfront or once you see the content is performing well. Things to consider when negotiating: how long you plan to use the content, and in what capacity (website, social, ad unit, etc.).
2. Make it part of your media budget and push the content out. This can be done through the influencer’s handle (typically called "white listing"), which will be shown to a larger number of people. Then test it by comparing it to your control unit. Test it in paid social and programmatic.

Balancing the influencer’s understanding of audience with the brand’s objectives

 

Brands need to balance what the influencer knows her audience will respond to with the fulfillment of the brand’s ultimate objectives. The most successful influencers can articulate why the way they want to present the content to their audience will inspire the audience to action. That’s where the magic comes in. 

 

In one Fidelity example, influencer Camden Scott is in her backyard with her dog talking about the house she just bought, which speaks directly to many women’s aspirations. She connects with what the brand is trying to achieve, which resulted in a great collaboration.

The lesson here is, brands can intimately understand their product and the regulations they must follow, but they don’t know the influencer’s audience. Influencers need to come to the table with an understanding of a brand’s needs and how to portray it best to their followers so that they take action. 

Turning On the "Always On" Influencer Button

Brands are seeing greater value in using influencers on an ongoing basis (Always On) rather than for one-off campaigns. In a world where brands are looking for more and more content to satisfy their social media channels, media units, websites etc., you cannot overestimate the value of continual content creation that comes from this approach.

 

This can be even more effective when activating multiple influencers as part of the marketing mix, because they each have their own audience. Conversations generated on social work in tandem with topline efforts (such as other PR/marketing efforts) to inspire action. Creating a groundswell of conversation helps support the brand message and leads to the third part of value: the impact on sales. This strategy can take a brand from awareness to purchase in just one piece of content. 

 

Brands simply need to recognize the value in front of them. Awareness is great, but it’s the proverbial tip of the iceberg. Make influencer content work harder, and watch ROI soar.